Matsushita Electric Industrial's Panasonic division will collaborate with Google to develop televisions that can be used to "easily watch Internet content".
The announcement was made at the Consumer Electronics show in Las Vegas by Toshihiro Sakamoto, president of Panasonic AVC Networks Co and Steve Cheng, the co-founder of Google's YouTube unit.
The main feature of the partnership centres on developing solutions to browse and watch Youtube videos from their TVs.
Several well known manufacturers like Apple, TiVO and Microsoft have already launched products that allows computer content to be watched on a TV.
Google's Picasa Unit is also said to be part of the plan although details of the partnership are still sketchy.
One of the main issues with Youtube is that uploaded video resolution is limited to 320 x 240 pixels and that blowing the size of such videos to large size screens will certainly look like vomit spilt on a wall.
Increasing the size of the videos on the other hand will increase the cost of bandwidth exponentially.
Doubling the resolution for example to 640x480 which is DVD quality, will demand four times the bandwidth amount, putting even more pressure on Youtube's finances.